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Europe Takes Bold Step Toward a Ban on Iranian Oil

PARIS — Iran on Thursday sought to downplay the importance of intensified economic sanctions against it, even as European Union countries moved closer to agreement on an embargo on Iranian oil, their boldest step so far in the increasingly tense standoff with Iran over its nuclear program.

A final decision by the European Union would not come before the end of the month and would be carried out in stages to avoid major disruptions in global oil supplies. But the move by some of Iran’s most important oil customers appears to underscore the resolve of Western allies to impose on Iran the toughest round of sanctions to date, increasing pressure on Tehran to stop enriching uranium and to negotiate an end to what Western leaders argue is an accelerating program to build a nuclear bomb.

Iran denies military intent and refuses to stop enrichment of uranium for what it describes as civilian purposes. But it has responded to the threat of new U.S. and European sanctions with a series of military and diplomatic threats. It has test-fired new missiles, announced the production of its first nuclear-fuel rod, warned a U.S. aircraft carrier not to return to the Persian Gulf, and threatened to shut the Strait of Hormuz to shipping, which analysts said could drive oil prices up by at least 50 percent.

On Thursday in Tehran, Foreign Minister Ali Akbar Salehi said Iran was “not concerned at all” about an imminent E.U. ban on its oil, vowing that Iran would “weather the storm’’ of what the Economy Minister, Shamseddin Hosseini, likened to “an economic war.’’

Mr. Salehi told a press conference that “Iran, with divine assistance, has always been ready to counter such hostile actions and we are not concerned at all about the sanctions.’’ He added: “Just as we have weathered the storm in the last 32 years with the hold of God and efforts that we make, we will be able to survive this as well.’’

But he also said that would like to reopen talks with the West on the nuclear issue, suggesting a resumption of talks in Turkey. That was interpreted in Paris as an effort by Iran to buy time to continue its program. The European Union foreign policy chief, Catherine Ashton, has been waiting for Iran to respond formally to an October 2011 letter suggesting a resumption of talks, which broke off a year ago when Iran presented its own set of preconditions, including a lifting of sanctions, that the West considered unacceptable.

In 2010, oil from Iran accounted for some 5.8 percent of total European imports of crude, with Spain, Italy and Greece the most reliant. The new Italian prime minister, Mario Monti, said this week that Italy would support an oil embargo as long as it was applied gradually and deliveries to repay Tehran’s debts to the Italian energy company ENI were exempted.

Turkey, not a member of the European Union, is another important customer, getting about 30 percent of its oil imports from Iran. It has asked the United States for a waiver on dealing with Iran’s Central Bank so it can continue to buy at least some Iranian oil.

The United States and France have been pushing hard for an embargo and sanctions against Iran’s Central Bank. But some European nations depend heavily on Iranian oil and have been reluctant to cut off their imports during a severe economic slump.

At the end of December, lower-ranking diplomats agreed in Brussels to the shape of a European oil embargo on Iran, vowing to meet objections by some states that have significant oil imports from Iran, including Italy, Spain and Greece.

Those countries also expressed concerns about the impact on their already fragile economies of the increase in oil prices that would inevitably follow a sudden embargo. Wednesday’s news caused a spike in the price of oil, with Brent crude reaching nearly $114 a barrel, up nearly $2 from Tuesday.

European Union diplomats said Wednesday evening that while objections to an embargo had been overcome, there had been no formal agreement yet.

The compromise was to draw up phased sanctions that would not immediately break pre-existing contracts, the diplomats said. Italy, for instance, has already paid for a significant amount of Iranian oil in advance, one senior French diplomat said. “If they stopped importing right now they would lose a lot of money,” the diplomat said.

The phased approach would also give international oil markets time to adjust to fill the supply gap created by a ban on Iranian oil, the diplomat said. Talks among European envoys will continue and focus partly on what contracts should be exempted from the ban and for how long.

“Now modalities and timing still need to be decided,” said another European diplomat, speaking on condition of anonymity as negotiations were under way. “There’s still a lot of work to be done,” that diplomat said.

In addition, European nations must resolve differences over sanctions on the financial sector in Iran, including transactions with the Central Bank, and here there was little agreement, diplomats said.

Alain Juppé, the French foreign minister, said Wednesday evening in Portugal that a decision on an oil embargo could take place at a European Union summit meeting on Jan. 30, although putting one into place would take longer.

“It’s at this occasion I hope that we can adopt this embargo on Iranian oil exports,” Mr. Juppé said at a news conference in Lisbon. “We are working on this. and things are on track.”

He said that “we have to reassure some of our European partners who purchase Iranian oil, we have to provide them with alternative solutions.” But alternatives exist, he said, without going into specifics, “and I think we can attain the objective by the end of January.”

In Tehran, the governor of Iran’s Central Bank, Mahmoud Bahmani, acknowledged Wednesday that the “psychological effects” of new United States financial sanctions were partly responsible for the devaluation of Iran’s currency, the rial, which rebounded some from record lows on Tuesday. Mr. Bahmani said Iran might raise interest rates to stabilize the market.

In comments published Wednesday, Mr. Bahmani said that Iran could handle sanctions itself. “I say this with great certainty that sanctions don’t create problems for the country’s economy,” he said. “While knowing this, the enemy is depending on creating psychological tensions. If we are intimidated, we will be playing into the enemy’s hands.”

James Kanter contributed reporting from Brussels.

A version of this article appears in print on January 5, 2012, on page A1 of the New York edition with the headline: In Bold Step, Europe Nears Embargo on Iran Oil. Order Reprints|Today's Paper|Subscribe